Report Proposal On Advantages and Disadvantages of Risk Management in the project

Abstract

Risk management is a standard method in the organization and is generally accepted. Risk management is known as a critical process towards attaining any project goals and objectives. To assist project management minimize the risk inherent with complicated tasks, a range of methods and strategies have been established because risk is typically viewed as a negative occurrence. Uncertainty, though, that may lead to more serious incidents can well contribute to opportunities. Professionals use risk management on the premise that risk management contributes value to projects. And in a project’s dynamic and ambiguous setting, value is always subjective. This research report provides an analysis of the literature and an analytical examination of the strengths and drawbacks of risk management of project. This study examines the idea of risk management in various types of project situations by projecting on the better practices in project ways that made up the standard risk management process. In addition, the literature review emphasizes that past research described risk management as a significant method for project management and may improve the chances of effectively achieving project goals. Therefore, as found in the existing literature, risk management has been used as a method to enable the project team to transmit risk information and improve the process of decision-making to balance risks and opportunities. The aim of this research is therefore to analyze the experiences of the participants on the coordination of risk management, project management and corporate project performance, and various benefits and drawbacks of risk management practices. This comprehensive research is focused on a systematic literature review, survey and interview, evaluated by qualitative analysis, to uncover the project’s subjective meaning in risk management. This research report explicitly examined how professionals viewed the link between risk-management techniques and their involvement in the project. The research report addresses the nature and importance of risk management practices within the business as the main area for the positive accomplishment of the project. Following the analysis of the literature, the project’s risk management approaches and standards and also process safety regulations were established. Findings from this analysis would have consequences for the understanding of risk management of the projects by professionals.

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Chapter One: Introduction

This research report discussed crucial topics pertaining to project management and risk management, the associated principles, and whether there is some connection between them in academics or professional practice. Through awareness of the interaction between project management, risk management and interpretation of individuals would bring one to learn information regarding the usage of risk data in decision-making. This will help create project risk-conscious environment. Overall, in projects, unintended circumstances arise that may manifest in either good or disappointing consequences that are a nonconformity from the project proposal. Positive outcomes are advantages whereas negative outcomes cause a disadvantage. Risk depends on avoiding losses due to unexpected circumstances[i]{NOTE:Williams, T. (1995). A classified bibliography of recent research relating to project risk management. European journal of operational research, 85(1), 18-38.}{NOTE:Williams, T. (1995). A classified bibliography of recent research relating to project risk management. European journal of operational research, 85(1), 18-38.}{NOTE:Williams, T. (1995). A classified bibliography of recent research relating to project risk management. European journal of operational research, 85(1), 18-38}{NOTE:Williams, T. (1995). A classified bibliography of recent research relating to project risk management. European journal of operational research, 85(1), 18-38.}. The literature comprises several meanings and descriptions of risk, and risk is usually denoted to as vulnerability to losses in a project[ii] [iii] or as a likelihood of losses in a project[iv]. Risk is measurable and extends itself to analytical modeling for review and evaluation. A circumstance in which a likelihood of occurrence cannot be attributed to an event is demarcated as doubt or risky[v]. Although ambiguity cannot be measured, it can be approximated using idiosyncratic evaluation methods.

Risk management mechanism deals with finding vulnerabilities in methods used in product production by a systematic methodology in order to assist and prompt mitigating phases to avoid risk, shift risk, minimize the prospect of risk or mitigate the risk effects. Consequently, early detection of potential incidents contributing to unintended losses is much safer than handling losses when they cannot be stopped[vi]. Risk management provides real and substantial advantages for organizations, their programs and their partners, but they cannot be accomplished by understanding the value of risk management at every level of the sector, along with organizational flexibility in the realistic claim of risk management[vii]. Risk management is the key management instrument which can be used by a project manager to significantly raise the probability of project accomplishment. As risk management is not commonly known to every organization, therefore, those who apply the risk management systems in their ongoing various projects may have a noteworthy competitive advantage[viii]. Risk management is the method composed of different parts: identification, analysis, response, monitoring and reporting[ix]. Moreover, risk management approach is built on rational decision-making. It sought to assess project-specific situations and events that can impact the innovative plan, and to improve action to guarantee the existing project on schedule. The contribution of the risk assessment approach to project performance is clear, since it discusses the real risks of the current project.

Project risk management is described as the instrument for recognizing, assessing and then reacting to challenges throughout a life cycle of any type of project to achieve its goals, “if somehow circumstances” are established in the viewpoint of risk management process, taking into account distinct sources of errors and techniques are formed to significantly reduce issues and protect project adaptability[x]. According to project management theory[xi] presented by Pinto (2013), project risk management has a positive effect on project success in terms of “on time, within budget delivery” of a predefined result. The regular and constant applicability of risk management strategies by project team members and managers in different projects with the passage of time leads favorably to risk management performance of their own projects [xii]. Risk management is a “method” in which project leaders recognize, evaluate and monitor project risks and are viewed in a social environment, which means that experiences between stakeholders in the risk management process can manipulate participants’ perceptions and assessments of realities, especially with regard to project consequences.

i. Background

After the eighth century, the world has experienced risk management where implementation of risk management was limited to the financial industry for even more than 200 years. Fifty years ago, the increasing importance of risk management prompted project management experts and educators to try to promote a usual procedure of risk management in their prescribed and guideline project management methods[xiii]. Risk-management methodology has grown by leaps and bounds. As of today, there has been close agreement among researchers and professionals that risk management has four main procedures: identification, assessment, response preparation, monitoring and control[xiv]. Nowadays risk management is among the most critical processes of project and operation management. Nevertheless, the increasing pace of shifts in project and business setting raises concerns about the possibility to achieve effective performance of conventional risk management framework. When projects are fraught with risks due to uncertainty and unknown factors, risk management takes on significance in the performance of the project[xv].

Risk is usually defined as an aversion to a circumstance which results in severe consequences. Nonetheless, project risk is an unknown occurrence or circumstances in the context of a project which, when occurring, has an optimistic or adverse impact on at least solo purpose of the project. So project risk is the probability of failure or benefit pain. If left unnoticed or overlooked, precisely the negative risk, it could investigated in the range with the project completion and could resulted in delays of time and costs, or decreased product or service quality[xvi]. Risks are important to all ventures because a project is a modern undertaking and unknown factors and risks are associated with something new. Progress is linked to risk-taking. Distinguishing between risk and problem is critical. The existence and evaluation of a project risk is a blend of an unexpected or undesirable incident, its possibility of outcomes and its impact on various types of project implementation. And the basic elements of risk preparation are defining, evaluating and reacting. For risk based analysis, three measures are inevitable i.e. defining a risk event or unexpected transition, measuring the possibility of its existence and evaluating its effect on main performance indicators such as scale, expense, time and efficiency of the project (Zakari Danlami, Emes & Smith, 2016).

Project risk can arise from two different ways; the first way is the uncertainties and unknown factors related to the project, and second way is the actions of individuals who are highly involved with the project. That makes it hard to minimize disruptions is that complexity is fundamentally a hard subject; it can be daunting in appropriate meaning (Elmaghraby, 2005) when simpler models are implemented to address risks. Project managers will thus have a higher opportunities to examine risks in the early phases of a project especially in comparison with the various stages of the project. When a risk management strategy may be established, assessed and implemented throughout the early stages of the project, the effect may be reduced or prevented (Anantatmula & Fan, 2018). Risk management has become one of nine fields of knowledge promulgated by the Project Management Institute. The gains of the Risk Management System involve risk acknowledgment and assessment, and development of project management events, and capable resource allocation. Risk and uncertainty for the projects can possibly have detrimental effects. Hence, risk enquiry and management continues to be an important characteristic of project management in an approach to cope conditions of uncertainty and unpredictable problems and accomplish successful project.

ii. Research Problem and Research Question

Society’s issues and concerns are changing exponentially and growing to unparalleled degrees of difficulty. Technologies are also noticeable changes and changing, adversely affecting the current world and reorganizing it. This, in effect, is introducing new possibilities and generating new problems. Project managers must have a strong footing in risk management to successfully cope with that environment. Numerous projects are deeply disturbed, with performance issues, costs and timetable. Poor risk management is one reason that causes deeply disturbed projects. The project management approach to the processes involves the pursuit of a holistic perspective of the controlled enterprise. Risk management is an essential aspect of project management and also in projects where threats are handled routinely, the quality of operation has major deficiencies.

Furthermore, the development of projects is among the most critical output trends, the performance of such projects ultimately depends on efficient management for the preparation, controlling and managing of ongoing projects and the appropriate steps to facilitate the execution of such initiatives. Today, project management is a critical domain in business, engineering management information systems, even though understanding the project’s planning , control and schedule changes skills has become integral to business success, as the global business environment is diverse and constantly evolving the lot of possibilities and risks are abruptly taken into consideration, due to ignorance and misunderstanding[xvii].

One of the essential management responsibilities is the review of discrepancies; several management activities are also the preparation of documentation and the appropriate measures to resolve them. Risk management is a methodology in which one can examine, characterize, separate, and relieve the possibilities that can influence our task. Risk management is a significant portion of the project if executed correctly, can lead to the achievement of the project. This is an action plan that comprises of different advances which are done to guarantee the evacuation of threat. Sometimes in the project you deal with, it can include external risk, which is not in control; in that case, there is always a need for a plan that can reduce the effect of such uncertainty[xviii]. The risk mitigation technique to be utilized relies upon a project that can be tackled by the group of the team, so you must be cautious about creating a strategy towards risk. It expands the probability of your achievement up for the long term. These are the advantages of creating and applying a productive risk management plan during the project. It helps to keep away from any major disaster. Enhances your incomes by conserving your expenses.

Following is the research question for this research study

RQ1. What are the advantages and disadvantages of Risk management in the project?

iii. Research Contribution

Project Risk Management is secured in with making policies to forestall or border the consequence of disturbing threats to an undertaking. There is a consistent susceptibility factor about the constructive outcome of a venture. Things can be turn bad as quickly as environment changes, and when project supervisors hold the implication of the threat, the executives would be deliberately planning to deal with these dangers. At the point when the leader takes on a long-haul task, there is an excellent array of issues to be worried about, from setting up a financial limit to keeping staff on duty. In this way, all things considered, chance administration methodologies may never go into venture arranging. Nevertheless, investigating these methodologies is a need because the advantages of creating plans for dealing with unexpected issues are various[xix].

Furthermore, an inquiry into the massive increase in failed projects, financial crisis and globally emerging dangerous ecological damage has shown that non-inclusion of risk management in the preparation and whole development phase, low and complete lack of project risk management framework and ignoring minor risks contribute for the largest of these. Risk management is the main task of project-based establishments and their primary aim is to generate business value. Several project-based organizations have adopted project risk management programs in recent times to assess and control all of the dynamic risks of their programs. Previous projects risk management works confined themselves to developing and applying risk control programs. Some work on the performance evaluation of organizational risk management systems and catastrophe risk management systems has been performed. But there is a research gap in assessing the performance of the risk management program when executing the project and discussing the benefits and drawbacks of project risk management. Establishing a sound risk management system is of great importance in project-based enterprises dealing with very complex market environments. A suitable performance evaluation system is required in this manner. However, this crucial subject remained unknown to both the researchers and executives due to the lack of study in this area. The purpose of this study is therefore to examine the advantages and disadvantages of risk management in the project.

iv. Methodology Overview

The aim of this study is to fill the gap by undertaking in-depth research to define key performance indicators of the project risk management system and to provide a context for assessing the efficiency of this system in the light of the benefits and disadvantages of risk management. The study approach is focused on comprehensive risk assessment literature analysis, and performed survey-based research. The field research included interviews with qualified people who served on various ventures and evaluated the success of the projects using internal organization records. In addition, the accuracy of the structure was assessed by conducting interviews and updating risk management experts and integrating their suggestions. This research provides a thorough overview of the advantages and disadvantages of project risk management and developments in a project risk management program success evaluation. In addition, this research provides an important theoretical foundation for future research in this area of study.

v. Organization of the study

This research is divided into eight sections. Chapter 1 introduces the study; Chapter 2 explains situational analysis; Chapter 3 contains a literature review and contextual foundation on advantages and disadvantages of risk management in the project. Chapter 4 explains the data analysis and discussion of research. Recommendations are included in Chapter 5. Limitations and further opportunities are in the Chapter 6. Chapter 7 discusses about project reflection and learning from it. The final chapter is chapter 8 which includes conclusion.

Chapter Two: Situational Analysis

I have not done internship in any organization but I have conducted the interviews from the professionals of one of the construction company based in Australian for this research. The name and details of an organization and its employees is not mentioned in this report due to research ethics. Construction is a dangerous endeavor. Each construction project is altered and presents its own risks and rewards, as with the case with the selected organization. It may be difficult to identify and handle project risks, but it is not impossible and organizations may minimize the risk factor in the business through proper preparation and implementation. When a risk becomes reality, a project can be interrupted and interrupted, which is why the construction risk management is so critical. Organizations must be prepared to accurately assess, track and manage danger until it is detected in order to prevent a disaster.

There are different kinds of risks innate in construction based projects and organizations. These can be economic, statutory, organizational, and environmental and can be instigated by both internal and external foundations. Some of the risks that are attached with the selected organization are as follows:

Safety risks leading to fatalities and injuries for workers
Shift orders management
Unfinished designs and badly defined context
Unknown conditions at the site
Agreements in bad written form
Inattentive production cost rises
Employment shortages
Tools and materials damage or theft
Natural catastrophes
Contractors and vendors concerns
Construction materials availability
Bad handling of projects

Chapter Three: Literature Review and Contextual Foundation

Risk management functions and responsibilities within organizations have changed through the years, and have evolved. Due to challenges that have an effect on supply chains, cash, profits and activities, many businesses have realized the relevance and significance of company-wide risk management, and regulatory authorities have driven and reacted to that standards. Higher standards usually pose new difficulties. As organizations are increasing their overall standards of the risk management system, it is essential to specifically identify, accept and assess a structure for assessing the success of risk management[xx].

In an ever-increasing competitive environment climate, it has now become extremely convenient to be able to achieve effective and profitable business activities not only by effective core processes, but also by being able to reduce the damages caused by risk-taking. The latter by managing both accounting and strategic risks in a single model. Almost all the projects involves several risk factors that need to be tackle with proper planning and strategy. As regards the pace of developments related to the external world and the organizational processes, there are many risks and unforeseen circumstances that may present a challenge to the organization’s company. Risk is inevitable in the business operations and can have a substantial impact on them[xxi]. According to the definition of risk in any project, the risk may be specified in any project that a set of events is unknown which resulted from its existence of a positively or negatively influence on the objective of the project[xxii]. Therefore, here come the role of risk management while working on projects. Risk management is likely to be the most challenging component of project management. The management team needs to understand and investigate the causes of the risks and detect their repercussions through the project. In fact, risk management in the scope of project management is a thorough and structured method of defining, assessing and responding to risks in order to meet the goals of the project.

The risk management system is proven to be an appropriate tool for managing all risk factors in a systematic fashion (Khameneh, Taheri & Ershadi, 2016). The risk management system can provide an operative management reactions to a rapidly changing corporate environment and accelerate technical advancement. This system detect and systematically handles all risks of a business, regardless of extent and frequency. The key purpose of the risk management program is to prepare the staff and perform these tasks in consideration of threats and complications in order to handle challenges and complexities properly. Effective and efficient risk prevention is a vital consideration of the achievement of the risk management system. As the cycle of inadequate risk management lacks time and corporate capital and risk avoidance goals may therefore appear irrelevant[xxiii].

Overall, the risk management system must provide the framework for successful and reliable risk management. In this respect, it is clear that the successful performance of the risk management program is essential to its importance to the company (Khameneh, Taheri & Ershadi, 2016). The risk management program generates interest at both the executive and business unit grades. At the organizational level, this program provides value by allowing senior management to measure and control risks impacting the entire enterprise and other tools required to execute the policy and business model[xxiv]. The application of the risk management system involves the establishment of value-based management and forms the framework for the organization to identify decision making depends highly on company performance. There is a plethora of literature on challenged projects and risk management.

i. A Vigorous Risk Management Process

While the meaning of the word risk is somewhat questionable, it appears that the origin of the word risk is based on an Old Italian word i.e. riscare, which indicate the meaning of a danger. Risk in a project includes the chances of serious damages, the measurable probability of failure or less than anticipated earnings, the likelihood or potential of harm, damage or loss of value; or some other negative event[xxv]. As each project has objectives to be met, the risks must be weighed due to the possibility for failure of the project. For any initiative, targets need to be met and, as a result, risks need to be reduced. This reasoning could extremely restrict the self-determination of expression of the manager. It is also important that such acts be tolerated even though they may incur a preventable loss, but only if the potential level of loss appears to be appropriate[xxvi]. As a consequence, whether there is a requirement or necessity to compact the timeline for a project, such risks may have to be considered. The main purpose for the manager and any other team member is to have a complete sense of what these risks are and in what way they can be minimized. Mitigating is making things less serious or distressing. As a result, risk mitigation is either a significant decrease (or even an elimination) of the possibility that the risk will arise or a decrease in the adverse effect of the risk consequence should it actually happen.

ii. Project Risk Management

Organizations are continually changing their internal structures, entailing new forms of project management. Organizations are now actively finding operational effectiveness and outcomes efficacy, since resources are insufficient. Risk management of projects is a method meant to help project players recognize, evaluate and mitigate project risks while increasing maximum value for money. Risk management of projects is important to all stages, activities and players of the projects. There are professionals setting up the plan and accepting responsibility for it, players performing the risk management steps of the project and players making decisions by taking action. In addition, project risk management is the technique and practice of recognizing, assessing and reacting to risks during a project’s existence and in the better interests of achieving project goals[xxvii]. Project risk management required recognizing possible issues that could arise on the project and how they could hinder the progress of a project. Several results of the study found that inadequate risk management was a possible source of issues and delays in the projects. Research teams in risk management have concentrated on analyzing business processes that include recommendations for risk management, usually providing iterations on the four risk processes i.e. recognition, assessment, response management and reporting[xxviii]. In addition, Schwalbe (2015) identified six processes concerning risk management, including risk management preparation, risk assessment, qualitative risk evaluation, quantitative risk investigation, risk response scheduling and risk monitoring & regulation. Another researcher, Credar (2015) clarified that each project has risk, suggest; investments have left the company, management has moved and budgets have been reduced etc. There were plenty of unregulated influences. Nonetheless, with some fore thinking and continuing management, many risks to projects can be lessened or even removed[xxix].

iii. Project Success/ advantages due to risk management

There have been a various types of methods to project performance assessment. The DeLone and McLean model articulated six metrics for the performance of the project information system such as system efficiency, perceived satisfaction, and level of information, information usage, organisation performance and individual’s personality[xxx]. Many studies have proposed that projects should be considered a success when accomplished within or close to the projected timeframe and budget, and that they should deliver an appropriate standard of quality [xxxi]. In addition, Mahaney and Lederer (2011) performed a study that used a timely and budget-completed project that served as the indicators for measuring project progress. Some research were conscious about the advantages used as requirements to support project performance[xxxii]. Success of the project requires two parts, for instance success of project management and product[xxxiii].

iv. Risks and uncertainties in project management

Project threats and uncertainty are inevitable as a project is special by nature, and therefore poses unknown risk factors. Nevertheless, some scholars suggest that there are a number of research concentrating on risk control to the disadvantage of risk management and that risk and complexity management techniques that need specific approaches[xxxiv] [xxxv] [xxxvi]. Perminova et al. (2008) performed a study in many fields of expertise on the idea of risk and uncertainty. There is a strong difference in fields like psychology and economics, and risks are events susceptible to a known likelihood, while uncertainty is a condition about which an empirical possibility, marked by a deliberate loss of information about the outcome of an event, cannot be defined. The difference between the uncertain and the certainty, according to Wideman (1992), represents the boundaries of the realm of uncertainty[xxxvii].

Conversely, Perminova et al (2008) indicate that this differentiation is indistinct within the sense of project management. Risk is known as an undefined incident or situation that has a favorable or unfavorable consequence on at least one of the objectives of the project, i.e. time, cost, scope, or quality, if it takes place. Meyer, Loch, and Pich (2002) suggest that specific strategies are required, depending on types of risk. They say four kinds of uncertainty: variance, uncertainty foreseen, unexpected instability and disorder. They claim that even more emphasis is centered in action on the first form of risk and instability, i.e. volatility, which can be interpreted as casual variables of which the event and effect can be patterned on project targets. Such researchers claim that risk management is an explicit, pre-specified method that activates performance founded on indicators, which is feasible only if there is sufficient knowledge. Thamhain (2013) strengthens this concept by suggesting that complicated projects need involvement in management that goes beyond basic analytical methods[xxxviii]. Nearly 50 per cent of the uncertainties that existed throughout projects were found in his analysis of high-tech firms only once they had impacted the project results. Specific critiques are presented by Chapman and Ward (2003), Atkinson, Crawford, and Ward (2006), Perminova et al. (2008), and Cleden (2012)[xxxix].

Pich et al (2002) propose that, because of the presence of several factors (complexity), the explanation for inadequate knowledge is uncertain proceedings or causality (indistinctness) or a failure to recognize the consequences of behavior. Xiang, Zhou, Zhou and Ye (2012) also illustrate the knowledge related to discrepancy issue, which causes adaptable actions and greater risk in the construction projects[xl]. Pich et al. (2002) suggest that the management of projects in these settings involves a mixture of preparation (a capacity to perform unique and effective preparation in the course of the project) and selectionism (a pursuit for numerous substitutes before the right option is recognized). In this way, Ward and Chapman (2003) propose ambiguity management as a replacement for risk management, as the alternative requires a broader approach.

Regarding the project’s impacts of risks and complexities, the perception is that a double framework is taken that emphasizes not only on the adverse perspective of course or danger but also on the constructive perspective or prospect (Hillson, 2005; Perminova et al., 2008). Bernstein (1996) asserts that this notion is an extension of the term historically concerned exclusively with the detrimental impact, and in the late 1990s the literature started addressing significant outcomes and suggesting methods to promote them[xli]. This review indicates that there is a gradient amongst risk and ambiguity in projects and that management strategies will recognize this comprehensive scope, with various techniques involved (Carvalho & Rabechini Junior, 2015).

v. Managing Risks during the Project Life Cycle

When projects are conducted in stages, the phased approach to project risk management is often used, with systematic analysis at the completion of each process. The early stages concentrate on theoretical and tentative development of the product or service to be distributed by the project, while the later stages concentrate on comprehensive design and real project management. The key to the life cycle of the project is a steady and incremental rise in investment in a project, in line with gradually declining risk and rising clarity and confidence over time. Any small investment is made as it is warranted by the amount of risk and confidence, instead of contributing huge amounts at the inception of an unpredictable project. One project involves a huge mining company designed to extract magnesium from asbestos coal seams[xlii]. A pilot plant was designed and tested during the feasibility review, and it proved to operate. Construction and operations were under way in the project. Quite shortly after, the extraction plant collapsed, at considerable cost to the mining business (Fontaine, 2016). A crucial wasn’t really recognized: that even during delivering energy, impurities would build up within the machinery, impeding the output. Had this possibility been recognized before the design review, at this stage the project may have been scrapped or revised.

vi. Implications of risk management on projects

Söderlund and Maylor (2012) note that substantial focus has been devoted to the risk management arena in the examination on project management. Furthermore, the body of knowledge as mentioned by organizations and societies devoted to project management postulates that danger is a critical field. Nonetheless, many scholars note that risk management techniques are often rarely applicable to the everyday life of programs, including broad and complicated ones, thereby describing a void in the field (Zwikael & Sadeh 2007, Carvalho & Rabechini Junior, 2015). The literature provides risk-focusing frameworks that incorporate project uncertainty management (Chapman & Ward, 2003; Pich, Loch, & Meyer, 2002; Atkinson et al., 2006; Perminova et al., 2008; Cleden, 2012, Carvalho & Rabechini Junior, 2015). Many project risk lessening approaches embrace the notion of task groups during the life cycle, and contains the use of a variety of approaches and properties (Carvalho & Rabechini Junior, 2015).

Moreover, some reports have centered on determining the status of risk reduction activities for the sector. Zwikael and Ahn (2011) performed one of the most detailed surveys in three countries (Japan Israel and New Zealand), including 701 project managers from seven manufacturing sectors[xliii]. The research emphasizes the prominence of project context, taking into account the knowledge of project risk in the industry is affected. The writers propose that only modest level of research for reduction in risk would be adequate to lessen the harmful impact of threat on project performance. De Bakker, Boonstra & Wortmann (2012) confirms these results and highlights the value of recognizing threats as having a broader impact on project accomplishment, accompanied by risk analysis[xliv]. De Bakker et al (2012) recommend that operations in risk management make a significant contribution to project success through four diverse properties: action, perception, expectation and relationship. Effects of accomplishment are contributory in causing and stimulating an effective action by the stakeholders. Effects of clarification and expectation include the capacity of the stakeholders to make a consensus vision of the final intended result and to inspire their actions during project execution to overcome qualitative and quantitative differences. The findings indicate that help facilitate play an important role, in relation to the integrative effects of risk management, by having a common idea of the project’s complexities and perceptions for its achievement (Carvalho & Rabechini Junior, 2015).

Chapter Four: Data Analysis and Discussion

After defining and explaining the nature of this analysis in the previous chapter, it is then necessary to continue with the definition and selection of the most suitable research technique for this analysis to be used. In attempt to establish that this analysis is comprehensive, the research ‘onion’ method as shown in Fig 1 by Saunders, Lewis & Thornhill (2009) is applied to support in the development of the enquiry context, methodology and measures that this research will follow.

Fig 1. The Research Onion

This research analysis is focused on the advantages and disadvantages of project risk management. It also illustrates the association amongst project risk management and performance known as multi-method amalgamation of literature review and field research. Massive attention in the application of multi-methodological research to performance activities[xlv]. Numerous approaches for data collection were integrated in this analysis to accomplish triangulation. The very first step of the research intricate collecting literature data to develop the framework and hypotheses for the research. The first iteration of the data collection tool was regarded as a systematic examination of risk management literature. The sources mentioned in chapter on literature review have shown highly worthwhile for this research report, providing valuable framework for field research. The second phase was an interview-based study concerning project managers and providing data on project results, which is the research’s third phase. The field research intricate interviews with professionals working on different projects and an evaluation of company’s internal papers on the results of the project activities.

Fig 2. Risk Management Process

i. Research Design

When conducting the study, a detailed project design strategy is extremely necessary, because a clear strategy will promote the research process by having a consistent basis on which the data can be used to structure the study. Research design functions as a ties that bind together investigations in perfectly tight position, offering a guidelines for establishing investigations in its institution[xlvi]. In addition, research design serves as a framework by which many components are evaluated to justify the results of the research[xlvii].

This research emphases on evaluating the approaches to risk management and their benefits and drawbacks over programs. In trying to pursue this research a qualitative approach is being accompanied. Qualitative analysis is a systemic approach that explains experiences in life and their associated circumstances to bring clarity to them[xlviii]. In addition, qualitative research is like a type of social investigation in which individuals misinterpret their thought process and their perspectives about the lived experiences[xlix]. Many researchers use qualitative techniques to interpret the importance of the behavior, interactions, emotional responses and insights of people. Qualitative risk management processes require gathering primary data through verbal interaction, like interviews, and through questionnaires or surveys. Evidence were gathered based on perspectives and experiences of the researchers. Which ensures the qualitative evidence is arbitrary and not necessarily reliable. The consistency of data in qualitative methods relies on both the modes of thought of the subjects and on the researchers’ own understanding of the contextual data they gather.

The justification behind choosing a qualitative approach for this study is that the aim of this work is primary sources with different approaches for risk management. As their effect and management processes plans are evaluated, the risk identification data and how they were addressed in the projects are gathered most adequately through the use of verbal and questionnaire implies. Since these data are informative and not quantifiable, the qualitative approach is better for analyzing such instances.

ii. Data collection instruments

The data collection is a method that can be used to evaluate competences and perspectives. Data were gathered in this research through face-to-face interviews conducted and questionnaire execution[l]. The purpose of this research is to propose task analyzes of projects in attempt to acquire a thorough insight of risk management.

iii. Sampling

Sampling is addressed for this study using the theory of saturation in the perspective of the series of interviews to be performed with a perspective to collect sufficient data for the research. It is where the outcome trends will not detract by raising the number of interviews. The interview sessions were held by video conference with 8 interviewees and each interview ranged between 15 and 25 minutes. The participants were taken centered on the expertise, knowledge and participation in the organization’s specific classification of the project within risk management. That is accomplished by the organization’s contact level. Designation, responsibilities and experience of the interviewees are presented in Table 1.

Table 1. Particulars of the interviewees

Interviewee	Designation	Responsibilities	Experience
1	Head of Project Management	Evaluate all strategies, documentation and preparation sessions related to project management	20 years
2	Project management of one division unit	Managing risks around the different countries locations	19 years
3	Head of central unit function	Accountable for the organization’s project management , quality control, corporate legislation, environment and safety and risk reduction	17 years
4	Coordinator of Project management of one corporate unit	Responsible of the project management coordination, training and reporting	16 years
5	Works as the Project Management Office of a division	IT project manager; Internal programs	17 years
6	Project Manager of a division	Responsible to manage projects based on technical details having dealt with different operating systems	13 years
7	Works as the Project Management Office of a division	Responsible for the supervision of all project management tasks	18 years
8	Works inside a division’s Central Project Management Office	Attempting to deal with the main investment documentation of programs	19 years

i. Data analysis

The data collection process is subdivided into three-categories for clearer example; approach and type of data collection, method of data collection, and technique of data analysis. The first and foremost group contains the research approach described in this research as well as the kind of data to be gathered. After that, various qualitative methods of gathering data are presented in order to choose the best suitable technique for this analysis. This category also includes the data processing procedures which will be evaluated afterwards. The most suited data analysis method is then defined and the procedures and measures are described in the subcategory of data analysis method that concludes the category of data collection and data analysis in this chapter.

a) Approach and type of data collection

Qualitative data is the outcomes of the collection of qualitative data related with unstandardized data requiring categorization into groups based on Saunders et al (2009). Therefore, the type of data to be obtained, in this research is qualitative data, that has a level of consideration about the technique the data are evaluated.

b) Method of data collection

Various scholars are discussing the data collection methods required for the qualitative analysis approach. These methods are identified as techniques of interpretation that aims to determine, interpret and transform specific physical changes that occur in the social environment. The most suitable approach found for this study is interview, considering the purpose and depth of qualitative analysis as an explanatory research. For this research the semi-structured interview is chosen. Semi-structured interviewing is a non-standardized process in which the interview is carried out on the basis of a series of questions clearly related to the subjects to be discussed which can differ throughout the interview process[i].

c) Data analysis technique

The essence of qualitative data is connoted to the study phase of the life cycle of analysis. On the other hand, data collection, data analysis, development and idea evaluation are strongly interconnected and collaborative mechanisms[ii]. Examination of this sort of data must then be carried out by applying conceptualization. Examination at the data collection phase helps strengthen the course of data collecting for this study, when a hypothesis arises from the data gathered. It is because the template, together with the developed to define and during literature review process, is often used as a framework for the semi-structure interviews prior to the data collection phase.

ii. Discussion

In this part, the results of this research are addressed in detail. Trying to adapt contemporary organizations to the remarkable complexity and dynamics of their environment, and the related unexpectedness of changes that take place in it, provides a constant and rapid adjustment by established businesses of applied management operations and business models. This is a requirement for meeting business goals and obtaining competitive edge. Under such conditions, carrying out a risk assessment for the project only would consist in an inadequate circumstance evaluation scenario. This is vital to consider that risk management is carried out at four levels: strategically, operationally, at program level and at project level. This study report focuses on project risk management and tackles its advantages and disadvantages, despite the magnitude of the particular topic. The risk management process analysis of the project put in place suggested in the report provided an opportunity and hazard to be identified in the inner and outer setting of the project, security policy analysis and emergency procedures.

In the initial course of execution of the project, there were several possible issues with difficulty and cultural barriers in the international development of the study and creative design and inconclusiveness linked with its special structure. Even so, reliable risk analysis planning and efficient risk management enabled risks to be dealt with and possibilities taken full advantage of during execution of any development project. This research report demonstrates that risk management is required in large and small projects because the proper use of this method and management’s risk understanding and associated consequences considerably expand the operation of the project process and increase the probability of successful project. It must be borne in mind that no project can be scheduled without any error and that all things cannot be exclusively carried out as per the schedule. Risk reduction also requires tasks such as the detection of a possible hazard, evaluation of its impacts, and setting up risk minimization measures and reconsidering incidents that may adversely affect the project. This is why it is really necessary and crucial to study the various advantages and drawbacks of risk management in the projects to effectively execute projects.

In recent decades numerous experiments have been passed away in order to obtain a knowledge of the implications of risk project management on project performance, but they often highlight the complicated dimension of designing risk management systems, strategies and instruments. oThis channel has been integrated over time through the book of knowledge with a great deal of effort by trade associations, businesses and scholars. The results of this action are therefore already poor in the light of only one side of this analysis. The challenging dimension of risk assessment only encompasses some of the strategic dimensions of project risks.

Chapter Five: Recommendation

This study suggested the subsequent future research directions in order to further develop and fill in the missing information within the risk management knowledge field. Similar work can be done by expanding the size of sample and including all new development projects within the company or projects within various fields such as engineering, construction and IT sector from different organizations. Furthermore, upcoming research could be carried out by means of a blend of qualitative and quantitative methodology to improve the performance of the analysis, which would greatly lead to the generalization of the risk assessment tool with project classification.

Another recommendation for future studies is to use various models of project categorization to further investigate its effect on risk management, then draw a comparison to this study. Future work will suggest providing specific weights for each of the parameters with respect to the initial criteria within the project categorization. Future research will cover the full System for Risk Management.

Finally, this study has shown the correlation between the methodology of risk management and the categorization of projects. Linking these two things together has led to a new approach to risk management, which could ultimately minimize increased compliance and governance costs.

Chapter Six: Limitation and Further Opportunities

Certain characteristics of the methodological approach may restrict the generalization of findings from this research project. This work exposed the underlying shortcomings of the methodological choices followed, taking into consideration a range of chosen projects that was not likely to be present. Nevertheless, the sample size was determined and described for impact, precision and strength. In comparison, the project risk management literature reflects the definition of task groups in the life-cycle[iii]. This research does not include analysis of the effect of the project stage on the outcomes, nor does it evaluate in which stage of project risk management might be most successful, or in which stage the soft and hard sides of risk management are utmost required. This is an important field of research has yet to be discussed. In addition to the scope of the project and the business variables studied in this report, other variables i.e. moderating and control will be further discussed in the future, including life cycle stages and business size respectively.

Chapter Seven: Project Reflections

In this project, the initial steps I performed to step towards the target were to give my thoughts and ideas about what topics would be discussed and where study and analysis would be needed in order to have a successful result. The purpose of this research project is to systematically examine the “advantages and disadvantages of the risk management in the project” with respect to my own realistic experience dealing with risk. This project was started with a brief research proposal that was referred to and was then explored the ideas of risk management, project management, failure and success etc. The concepts that shape practice in relation to risk management in the project was also explored. This research project evaluates the idea of risk management in project settings by focusing on the established practices in project environments that form the traditional risk management method. This research focuses on the advantages and disadvantages of risk management in the project, and areas in which companies will gain from getting the opportunity to detect future problems before the problem occurs. The detailed examination of literature was conducted that involve analysis of various past work done in the selected field. The hardest part was the data collection part as data was collected by professionals of one of the Australia based Construction Company through video conferencing. To take the appointment from such professionals is one of the difficult task but that god, I managed to do so. Then, I arranged the data collected from the respondents and do further analysis. As the research is based on the concept of risk which itself means uncertainty so it is difficult to conclude the results of the study based on different views of the respondents on the concerned topic. The reason is that risk is not something that has to be treated lightly when interacting with issues that require high-end projects that follow precise requirements, timelines and end-customer standards. Project risk management enables us to be proactive early in the preparation and implementation phases of the methods for a project. This project helps me in various ways i.e. increase my knowledge on this crucial topic, elaborate my understanding related to risks present in the organization and how to handle various associated risk present in the organizations.

Chapter Eight: Conclusion

Project risk management is a main component for a successful project schedule, time management, cost calculation and coordination of projects as straightforward as it can sound and little known by others. A successful project execution is often accomplished by incorporating risk control at all project levels beginning with preparation, development and eventually execution. Risk management and risks more commonly has to be a part of regular thought process and know-how. It’s like a way of life; project teams have to be well conscious of the threats and the positive or negative effects, and be willing to handle or minimize them in the most definitive manner. This paper was an analysis in the process of project management and risk management perspectives from the risk management of researchers and professionals on project performance. The project management literature has gained significant coverage as a general concept based on project performance over the past 30 years. Risk management seeks to mitigate the negative effects of possible threats that might be required to profoundly understand a certain operation. All projects are prone to different degrees of ambiguity and vulnerability due to its unique nature. And one of the greatest challenging tasks is the risk management of a group of professions which make up a corporate project. It is up to the project manager to build the capacity to predict activities, identify resources or evaluate risks, enabling timely execution of mitigation strategies. The primary aim of this study was to validate the effect of adapting a risk management methodology to the project goals. The approach adopted is intensive on the phase of risk management generally applied to during the development and execution of any project.

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Appendices

Appendix 1. Questions asked from the participants

This research aims at examining and understanding the advantages and disadvantages based on project categorization and its different approaches of risk management.

Introductory questions:

Please tell me about your company, the sector in which it operates and the number of projects undertaken.
What position and role do you play in this organization?

How long have you been employed in this company or service?

Main questions

Which kinds of tasks do you manage / supervise at the organization?
What are the key features of the project that you operate?
What is risk management, from your perspective?
Which method(s) of minimizing risks did you employ?
How do you do project risk management? Explain its advantages and disadvantages?
Which methods do you think are effective for doing risk assessment and risk analysis?
How do you relate risk management to classification of a project?
Why do you consider risks can be reduced and managed properly?

* Anything else you’d like to add? Any other elements of connecting risk management and project classification that should be considered?